Gilmartin ESG Newsletter | October 12, 2023

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Welcome to the latest edition of Gilmartin Group’s ESG newsletter. With a special focus on the healthcare sector, this newsletter sheds light on the latest trends in the rapidly evolving ESG space, covering developments with companies, investors, regulators, and policymakers.

In The Spotlight

At the end of September, DWS, Deutsche Bank’s asset management arm, agreed to pay a $19 million fine to settle charges that the firm made “materially misleading statements” about its ESG capabilities. The SEC’s investigation dates back to 2021, when DWS’ former head of sustainability alleged that the firm misrepresented how it integrated ESG factors into its investment process.

The settlement comes just days after the SEC formally adopted changes to the “Names Rule” in order to combat such misleading claims, often referred to as “greenwashing.” The amendments require funds with “ESG” labels to clearly define their ESG investment strategy and allocate at least 80% of their assets in-line with that strategy. The new rule also requires funds to conduct quarterly reviews to ensure that they remain in compliance.

The Healthcare View

More than 75,000 Kaiser Permanente employees went on strike for three days last week amid disputes over chronic staffing shortages. Striking workers argue that a lack of adequate staffing is not only leading to burnout, but also negatively affecting the quality of patient care. Although the strike was mainly driven by support staff – doctors and most nurses were not involved – union leaders claim that this was one of the largest strikes by healthcare workers in recent U.S. history. Kaiser officials managed to keep hospitals and emergency rooms open, but the strike did lead to several disruptions in Kaiser’s services, including a reduction in procedure volumes, especially for non-urgent procedures and laboratory work.

On Monday, the Coalition of Kaiser Permanente Union stated that unless the two sides come to a settlement before the end of October, there will be a weeklong follow-up strike, which will take place from November 1st to November 8th.

A Note on ESG Ratings

ISS ESG, one of the most prominent ESG ratings firms, launched its inaugural ESG Corporate Rating Survey in late September. The firm is seeking feedback as it “enhances and aligns its methodology in a rapidly evolving regulatory landscape.” The survey addresses ISS ESG’s overall approach to its ratings, alignment with ESG disclosure standards, the relevance of certain topics across different industries, and use cases for the ratings reports.

Institutional investors, public companies, academics, professional services firms, and all other interested stakeholders are invited to respond. The survey takes about 20 minutes and the deadline for completion is October 20th.

In The Weeds

Morgan Stanley’s Institute for Sustainable Investing and the Stanford University-based Natural Capital (NatCap) Project recently launched InVEST™, a free, open-source tool that enables companies and investors to assess the impact of their activities on biodiversity and natural ecosystems. Companies and investors can use the tool to analyze their impact on natural assets such air, water, and soil. The tool also provides guidance for companies to disclose against the newly released Taskforce on Nature-related Financial Disclosures (TNFD) recommendations.

To learn more about how Gilmartin strategically partners with our clients, please contact our team today.

Authored by: Patrick Smith, ESG, Gilmartin Group & Tamsin Stringer, ESG, Gilmartin Group

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